Fantastic news for savers today as peer-to-peer lending will soon be included in ISAs as announced by George Osborne in the Budget today. The peer-to-peer ISA is an extremely exciting saving option for UK savers – enabling them to grow their money much faster, with reliable and safe returns.
By lending through Zopa with an ISA, UK savers will be able to make at least 2.5 times more interest than the sub 1.6% cash ISAs from banks with the same tax free benefit. Unlike other riskier stocks and shares ISAs, a more reliable and predictable Zopa ISA would allow every saver to become a millionaire under 30 years at the current rate of 5% if they used their full ISA allowance and would double their savings to £2m by saving for a further 11 years. Meaning that by 2044 you could be a Zopa millionaire with over £649,000 in interest alone!
Although it is early days yet in terms of timeline and exact details, here is what we do know and what peer-to-peer ISAS will mean to you;
- Peer-to-peer lending will fall under the new single ISA allowance of £15k
- Interest on savings up to £15,000 will be tax free each year, any amounts over this limit will be taxed as normal
- The official Zopa launch date is still to be decided as we have to get some technical processes in place
- Your lending account will not automatically become an ISA account, this will have to be instructed by each saver to transfer their ISA wrapper to Zopa
Our CEO Giles had this to say about the good news, “Peer-to-peer ISAs are the most exciting thing to happen to the industry since Zopa launched back in 2005. This is a game changing moment for all savers. With ISA inclusion now a reality, we expect to see thousands of people transferring their existing ISAs over to Zopa once we launch them. Peer-to-peer ISAs will help provide a high tax free return and bring consumer savings back to life, even better to know is that all lending is covered by our Safeguard fund, so you can earn high returns and feel safe that your money is protected.”
It is too soon to know the exact details but positive progress has definitely been made with this announcement. We will of course notify all customers ahead of the launch with details on how to transfer and set up your ISA with Zopa.
This is very exciting for Zopa savers as it provides great opportunities to earn much more money on your savings each year.
If you are new to peer-to-peer lending, you can learn more about how Zopa works and kick start your lending today by visiting our lending page – www.zopa.com/lending/grow-your-savings
Are you looking forward to tax free lending and including Zopa as part of your ISA? If so, tell us your thoughts and comments below.